IWF vs VUG: Near-Identical Growth ETFs at Very Different Fees

Disclaimer: This content is not investment advice. Investing involves the risk of loss of principal. Past performance does not guarantee future results. Always consult a qualified financial advisor before making investment decisions.

The iShares Russell 1000 Growth ETF and the Vanguard Growth ETF track different index families built by different providers, which sounds like a meaningful distinction. The live IWF vs VUG comparison says otherwise: 84.66% weighted overlap across 127 shared holdings, a Very High Overlap verdict.

Two different index providers, one nearly identical portfolio — and a fee gap that is not identical at all.

Why Different Indices Converge

Growth indices differ in the details: Russell and CRSP use different metrics, different rebalance schedules, and different rules for splitting companies that show both growth and value characteristics. In principle those choices should produce different portfolios.

In practice, both methodologies point at the same place. The largest U.S. growth companies are unambiguously growth companies under any reasonable screen, and cap weighting then hands them the same dominant share of each fund. A megacap sits near 13% in both funds; the next two are within half a point of each other.

Under the weighted formula, only the smaller weight counts:

Overlap = Σ min(weight in IWF, weight in VUG)

When the top holdings agree to within a fraction of a percentage point, the score climbs fast. The methodological differences show up in the long tail, where individual positions are too small to move the total much.

The Fee Becomes the Story

When two funds deliver 84.66% of the same exposure, cost is no longer a tiebreaker — it is close to the entire decision. IWF carries an expense ratio several times VUG's, a gap far wider than the portfolio difference that gap is buying.

That does not automatically settle it. Institutional investors sometimes prefer IWF for its options market and its role as a Russell-benchmark vehicle, and an investor sitting on large unrealized gains has a real reason not to switch. But for a taxable buy-and-hold position being opened today, paying a materially higher fee for 84.66% of the same portfolio is difficult to justify on the holdings alone.

Holding Both Is the Clearer Mistake

A Very High Overlap score means the second fund contributes little beyond what the first already provides. Two growth funds in one portfolio typically produce:

• Duplicated megacap concentration, since both are dominated by the same handful of names.
• A diversification illusion — two line items, one exposure.
• A blended fee that lands somewhere above the cheaper fund for no additional diversification.

If the goal is broader growth exposure, the useful comparison is not IWF against VUG. It is either fund against your core holding: VUG vs VOO shows how much of the growth sleeve your S&P 500 fund already owns.

Reading the Score in Context

IWF and VUG sit closer to the duplicate end than most investors expect from funds with different index providers. That is the takeaway worth carrying: the index brand on the label tells you less about the portfolio than the weighting scheme does.

How to Check Your Own Style Sleeve

1. Run your growth funds against each other, then against your core fund.
2. Read the weighted score rather than counting shared tickers.
3. Where overlap is high, let cost, tax position, and platform decide — not the index family name.

See the methodology guide for how the score is built, and how to reduce ETF portfolio overlap for a portfolio-wide pass.

Conclusion

IWF and VUG share 84.66% of their weight across 127 holdings. Different index providers, effectively the same fund — so the decision comes down to what you are paying for it.

Compare any pair at ETF Overlap Checker — free, no account required.